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Women face difficulties in retirement

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With longer life expectancies than men, women tend to live longer in retirement and have a greater chance of outliving their retirement nest egg.

Multiple factors play into this crisis. Women are more likely to suffer job interruptions and other income setbacks. The typical male retiring in 2000 had 44 years in the workforce, according to the Social Security Administration. The typical woman had worked 32 years. Fewer working years means less opportunity to save for retirement and build Social Security benefits.

Women take more time out of the office. Not only are women more likely to stay home and raise their kids, but they are also more likely to be caregivers to family members. Seven out of 10 unpaid caregivers are women, according to AARP, and more than half of caregivers make changes at work to accommodate their patients' needs. This may include working different hours, working fewer hours or taking unpaid leaves of absence. These accommodations create challenges for women when going after promotions and overtime.

Women earn less. Yes, there has been more equality over the years, but the reality is women earn 79 percent of what men are paid weekly, according figures published in January 2013 by the Bureau of Labor Statistics.

Women will probably die alone. Sorry, but that's the grim reality. Those who don't divorce are still likely to outlive their husbands. According to the Social Security Administration, women reaching age 65 in 2011 are expected to live, on average, an additional 20.7 years compared with 18.7 years for men.

Women are more likely to retire into poverty. Women are 71 percent more likely than men to live below the poverty line in retirement. When you compare unmarried women to married couples, the statistics are more shocking: Single women are four times more likely than couples to live in poverty. Here in San Diego, 50 percent of senior women lack enough income to meet their basic needs, compared to 35 percent of men.

Women are not saving enough. Because women take home less than men, not only is it hard to save money, but they are also more risk-averse in their retirement planning. According to the SaveUp U.S. Consumer Savings and Debt Report release this year, men have 28.8 percent more than women in their 401(k) plans and 72 percent more in their IRAs. The only type of account where women average a higher balance than men is in a money market account — a conservative, low-growth investment.

Taking these factors into consideration, it is no wonder women are facing a retirement crisis. Given women’s median retirement age of 61, women should be planning on a 30-year retirement — or even longer. So what can women do to manage their money and make certain they have enough to get them to the finish line?

1. Make retirement savings a priority. Don’t count on winning the next Power Ball; put yourself first and put away money each month to plan for the future. Another mistake many make is providing the best for their kids or saving for college for their kids while letting their retirement savings slide. Do your kids a favor: Save enough so that you're not such a burden to them in your old age.

2. Take advantage of your company’s 401(k) and other retirement saving options. If your company has a matching program, be certain to take advantage of it.

3. Keep one foot in the door. You may have responsibilities at home, but don’t stay out of work too long. Every year you don't work can rob you of an opportunity to contribute to retirement plans and potentially lower your future Social Security check. Full-time homemakers should take other steps to protect their financial futures.

4. Get educated about money. Once you're retired, you're playing for keeps. If you make a mistake with your money, you're much less likely to be able to recover than during your working years.

Lastly, if you are an employer, make policy changes that could ease the problem. For example, end the wage gap that contributes to lower lifetime earnings for women. Another idea is to provide more flexibility in the workplace to make it easier for caregivers to work and care for their loved ones. Also, give the opportunity in the workplace for women to learn about retirement, and make more aggressive contributions to prepare for their long-term retirement needs.

Women who prepare now will thank themselves down the road. A great place to start is to visit AARP’s Decide Create Share website, which provides information on retirement planning.

Downey is president and CEO of Senior Community Centers, a nonprofit agency dedicated to increasing the quality of life for San Diego seniors living in poverty. Learn more at www.servingseniors.org.

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